NCERT Solutions Class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves

Scroll down for PDF

NCERT Solutions class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves. NCERT book for Accountancy in class 11 is strongly recommened by teachers and the CBSE and NCERT boards. Please download the NCERT solutions for class 11 Accountancy free in PDF made by teachers of the best schools in India. These solutions are carefully compiled to give detailed understanding of the concepts and also steps of solutions. The NCERT solutions are free to download in pdf format. Please refer to the download link below to download the pdf file and also refer to other chapters and subjects to get the solutions to Accounts NCERT book questions and exercises.

Q1. What is ‘Depreciation’?

Solution: Depreciation means fall in book value of depreciable fixed asset because of

1. wear and tear of the asset

2. passage/efflux of time

3. obsolescence

4. accident A machinery costing ₹ 1,00,000 and its useful life is 10 years; so, depreciation is calculated as: Annual Depreciation per annum = Cost of Asset-Estimated Scrap Value/Expected or Estimated life of Asset = 100000/10 = ₹ 10,000

Q2. State briefly the need for providing depreciation.

Solution: The needs for providing depreciation are given below.

1. To ascertain the correct profit or loss: Correct profit or loss can be ascertained when all the expenses and losses incurred for earning revenues are charged to Profit and Loss Account. Assets are used for earning revenues and its cost is charged in form of depreciation from Profit and Loss Account.

2. To show true and fair view of financial statements: If depreciation is not charged, assets will be shown at higher value than their actual value in the balance sheet. Consequently, the balance sheet will not reflect true and fair view of financial statements.

3. For ascertaining the accurate cost of production: Depreciation on the assets, which are engaged in production, is included in the cost of production. If depreciation is not charged, the cost of production is underestimated, which will lead to low selling price and thus leads to low profit.

4. To provide funds for replacement of assets: Unlike other expenses, depreciation is non cash expense. So, the amount of depreciation debited to the profit and loss account will be retained in the business. These funds will be available for replacement of fixed assets when its useful life ends.

5. To meet the legal requirement: To comply with the provisions of the Companies Act and Income Tax Act, it is necessary to charge depreciation.

Please click on link below to download NCERT Solutions class 11 Accountancy Chapter 7 Depreciation, Provisions and Reserves.

Tags: 


Click on the text For more study material for Accountancy please click here - Accountancy

Latest NCERT & CBSE News

Read the latest news and announcements from NCERT and CBSE below. Important updates relating to your studies which will help you to keep yourself updated with latest happenings in school level education. Keep yourself updated with all latest news and also read articles from teachers which will help you to improve your studies, increase motivation level and promote faster learning

CBSE Board Exams Changes to be implemented in exam pattern

CBSE Board Exams Class 10 & 12 2020: Changes to be implemented in exam pattern Are you appearing for the CBSE Class 10 and 12 Board Exams 2020? If yes, then you have to check out what CBSE has brought the major changes for the CBSE class 10 and 12 board exams 2020...

CBSE Board Practical Exam 2020

CBSE Board Practical Exam 2020: Important changes in date sheet, internal/external examiners and more Are you doing preparations for class 10 and 12 CBSE board exams? If yes, then you have to see what major changes CBSE has brought in the CBSE date sheet for class 10...

CBSE Instructs schools to form Eco Clubs

The Central Board of Secondary Education has directed schools to form Eco Clubs under the Board for Environmental Protection. They have further asked the schools to ensure that every student would save one litre of water at home and school every day. It was started by...

Vidya Daan by CBSE

CBSE has launched a new initiative to provide free of cost quality education to students in rural areas. CBSE has named that initiative “Vidya Daan”. Lot of reforms are been continuously done by CBSE so that the teachers can offer a personalized experience to students...

Class 10 and 12 exam 2020 application process for private candidates

CBSE 10th, 12th exam 2020 application process for private candidates begins to apply by 30th Sept at cbse.nic.in CBSE Board Exam 2020 application begins: The Central Board of Secondary Education (CBSE) has officially started the online application process for the...

UP government schools will follow NCERT

UP government schools will follow NCERT pattern from April 2020Are you appearing for the UP exams 2020? If yes, then you have to see what major changes UP government schools have brought for 2020.The UP government is fully prepared to implement NCERT pattern for...

×
Studies Today